Financial literacy is an important life skill that everyone should possess, including children. Teaching your kids about managing money from a young age can set them up for financial success in the future.
One way to start this journey is by getting them a debit card and teaching them how to use it responsibly. This is particularly important in a financial world that primarily operates digitally rather than with hard money.
Many debit cards have features and benefits and are designed specifically for children. This article will discuss the six best debit cards for kids to build financial literacy.
What To Look For in a Good Debit Card for Kids
When looking for a debit card for your child, there are certain things you should consider to ensure that it will be beneficial in building their financial literacy. These include:
- Parental controls: The card should have features that allow parents to monitor and control their child’s spending.
- Rewards and incentives: Some cards offer rewards like cash back or discounts for good financial behavior, such as saving or budgeting.
- Low fees: Look out for cards with low or no fees, such as monthly maintenance fees or transaction fees. Some cards have no monthly fees, while others charge a certain monthly amount per child or family. Other fees to consider are fees at ATMs, overdraft fees, foreign transaction fees when traveling, and transfer fees.
- Educational tools: Some cards have educational tools and resources to teach children about money management. It can provide games and incentives for children to learn about budgeting, saving, and spending.
- Deposit requirements: Some debit cards require an initial deposit, while others do not have such a requirement.
- Spending limits: Choose a card limiting your child’s spending each day or week. It will prevent overspending and teach responsible financial habits.
- Investment offers: Some cards offer up to a 5% return on savings (APY or annual percentage yield) as a reward, while others allow the child to invest in stocks or start their own business.Â
- Insured: Choose FDIC-insured trusted banks and companies to protect your money.
The 6 Best Debit Cards for Kids
Below are the six best debit cards for kids currently on the market. Review each option to help decide what would work best for your child or family.
Free Debit Card Options
Surprisingly, many popular debit cards for kids come with a monthly fee. However, a handful of free options will serve the purpose, too. These options often don’t come with the educational bells and whistles of the others, but they do get the job done.
1. Open a free bank account with a debit card
Many banks offer free checking accounts for minors, which come with a debit card. Most of these cards are sponsored by Visa or MasterCard and are used everywhere. To open an account, visit your bank’s branch office with the child and their social security number.
For example, Capital One, Chase, Axos, and many local credit unions offer free checking accounts and debit cards. As a parent, if you already have an account with the bank, it’s usually straightforward to add your child as a joint account holder and get them a checking account.
2. Revolut <18
Revolut is a banking platform primarily for adults, but it has recently launched a debit card option for children ages 13 to 18. This card, technically a prepaid debit card, is geared toward teens and is one of the few options with a free app. The app is simpler than other options but offers financial education, savings goal-setting, chore-tracking, and more.
The Revolut <18 card comes with parental controls that allow parents to monitor spending in real-time, pay bills, and manage their child’s spending with locks on spending or withdrawal for the cardholder if needed.
Its only drawbacks are that it doesn’t offer savings interest or investing and requires a parent account first. Overall, parents like this card for its basic features and zero fees.
3. Current
Current is a prepaid debit card built for teens to learn how to manage their money in the real world. It offers an allowance feature, savings goal-setting, limit setting (for spending), giving options, instant transfers between family accounts, and more. Parents can monitor and make adjustments as needed.Â
It has no monthly fees or fees for overdrafts or ATM withdrawals when your teen wants to get cash. In addition, the Current is the only free card offering savings interest with a minimum deposit of $200. It does not provide investment options and requires a mobile app (not accessible via computer monitors).
Overall, this card is excellent for helping teens get a handle on daily spending.
Best Options for Teaching Financial Literacy
These options often offer parent-child integrated functions but are more geared toward financial literacy education for all ages (not just teens). Plus, many offer options for high-yield savings and investing, too.
4. Greenlight
Greenlight is designed for kids of all ages with no minimum age requirement. It’s a debit MasterCard that allows parents to control and monitor their children’s spending while teaching them how to manage money through its app. The app has features enabling parents to set up savings goals, give allowances, assign chores, limit spending, and instantly transfer funds.
There are three different tiers of membership, starting at $4.99 for one child and 1% interest savings and going up to $14.99 for multiple kids and 5% savings.
The Greenlight offers the highest savings options for kids, plus a few limited investing options. It also comes with interactive games kids can play to learn more about responsible spending. Many families are happy with this choice even at the higher price point.
5. Go Henry
Go Henry is another popular choice for teaching financial literacy. It is best known for its interactive app that makes money literacy fun for kids. It gamifies how children learn about spending and saving with “Money Missions.”
The app allows parents to monitor spending and set limits, chores rewards, savings goals, and allowance functions. You can also lock and unlock the card via the app. It does not offer savings or investing options. Prices start at $4.99 per child or $9.98 for up to 4 children. Parents who are Acorn premium members (an investing platform) can open up to 4 GoHenry accounts for free.
This Visa debit card is an excellent choice for kids of all ages for its fun factor.
6. Copper Card
Copper Card is one of the only prepaid cards on our list offering savings and investing options as a premium member. Like other cards on this list, it provides complete parental control, tracking, and managing your child’s spending.
The monthly fee starts at $4.95 for a basic plan with 2% interest savings. For $7.95 monthly, you can add investment options, including low-cost exchange-traded funds (EFTs) with an adult account, and get up to 5% interest savings.
How To Teach Kids to Use a Debit Card Safely
Starting with the basics is essential to teach your kids how to use a debit card safely. Here are some tips to help guide you:
- Explain the difference between credit and debit cards: Teach your child the importance of keeping track of their spending on a debit card because they’re using real money from their account. Talk about overdraft fees and how to avoid them with a spending plan.
- Discuss sticking to a budget: Make sure your child understands that the debit card limits how much they can spend and that sticking to their budget is essential.
- Monitor transactions: Encourage your child to check their accounts regularly so they know where their money is going. This will also help them spot any fraudulent activity.
- Teach them about fees: Explain that using an ATM outside your bank’s network or overdrawing their account can result in fees (if applicable). Make sure they understand the consequences of these actions.
- Show them how to save: Use the savings features on their debit card (if available) to teach them the importance of saving money for future expenses.
- Lead by example: The best way to teach your child about responsible spending is to model it yourself. Letting your child see how you use your debit card can help reinforce good financial habits.
- Have open discussions about money: Encourage your child to ask questions and discuss any concerns about using a debit card. It will help build their understanding and confidence in managing their finances.
Debit Cards for Kids FAQ:
After reviewing the six best debit cards for kids, you might still have questions.
Should you get a debit card for your teen or child?
The answer to this question depends on your child’s level of responsibility and readiness. It may be worth considering if your child is mature enough to handle a debit card and begin learning how to manage money. Some cards also allow them to start building credit history at a young age.
What is the youngest you can have a debit card?
The youngest age for a child to have a debit card will vary among card providers. Some may require that the child be at least 13 years old, while others may allow younger children with parental consent. It’s essential to research and compare options before deciding on a card.
Are there any alternatives to a debit card for kids?
Yes, there are other options for teaching kids about finances besides a debit card. These include prepaid cards, cash allowances, and virtual money management apps. Choosing the option that best fits your child’s needs and learning style is essential.
Getting Started with Debit Cards for Teens and Kids
Introducing a debit card to your child or teen can teach financial literacy and responsibility when it comes time to paying bills and saving money. By doing thorough research and choosing the right card that fits their needs, your child will have a strong foundation for managing money in the future.
This article originally appeared on Wealth of Geeks.Â